For two months, the Korean residents of the Shin-Okubo district of Tokyo have lived in peace.

The aggressive and abusive demonstrations that had become a regular occurrence every Sunday - designed in part to intimidate as well as to damage the neighbourhood's economy by frightening people away from the shops and restaurants - suddenly stopped.

The banners demanding that Japan sever all ties with Korea and the vicious chants of "Kill Koreans" or "Send them to the gas chambers" disappeared overnight. The police no longer had to wear riot gear as they carried out their regular patrols.

But everything changed again on September 8.

Within hours of the International Olympic Committee announcing that Tokyo had been selected to host the 2020 Olympic Games, extremists linked to Zaitokukai - the nationalist group that refuses to tolerate special privileges for Korean and Chinese residents of Japan - were out in force once more.

Protesters ranging from aggressive young toughs to well-dressed retirees met in a public park and, marshalled like a miniature army, deployed their banners and marched towards the nearby Tokyo Korean School.

Banners were held aloft proclaiming "Congratulations on the 2020 Olympics in Tokyo!" and "Break off relations with South Korea". Outside the gates, the demonstrators chanted slogans demanding that the government halt state subsidies to the school and others like it across Japan.

"In order to ensure that Tokyo won the contest to host the 2020 Olympics, they intentionally stopped holding these regular demonstrations," a Korean resident, who did not want to be named, told the South China Morning Post. "But as soon as Tokyo had won - just a couple of hours later - here they were again with their hate speeches and demonstrations."

Despite the protest being heavily policed only one man was arrested -and that was for damaging private property after he ripped up one of the banners bearing anti-foreigner slogans.

Despite Japan being a party to the International Convention on the Elimination of All Forms of Racial Discrimination since 1995, the statute has not been enacted into law, meaning nationalists are free to spout their hatred of foreign residents with impunity.

Just as the original protests attracted little attention in the domestic media, this latest confrontation - and its timing - has been overlooked in Japan.

Instead, most attention has been focused on the cost of the Games, which the Bid Committee estimated to be 734 billion yen (HK$57 billion), split between 30 billion yen for operating costs, including wages and security, and 385 billion yen being set aside for construction projects, such as new stadiums and an athletes' village.

Television rights, sponsorship and ticket sales are expected to bring in 249 billion yen, but a whopping 391 billion yen will come from taxpayers. Cynics say the 734 billion yen estimate will inevitably fall well short of the actual cost, pointing out that the total cost of the London Games in 2012 was four times the figure that was initially announced.

There are many who argue the money would be better spent on helping the people who lost their homes and livelihoods in the Great East Japan Earthquake in March 2011, as well as dealing with the other huge pall that continues to hang over the nation: the ongoing crisis at the Fukushima Dai-Ichi nuclear plant.

"Personally, I'm not all that excited about Tokyo getting the Games purely because I thought that the budget should have been invested in fixing the problems at Fukushima and helping people throughout the Tohoku region," said Makoto Watanabe, a lecturer in media studies at Hokkaido Bunkyo University.

"But now the decision has been taken and the Olympics will be in Tokyo in seven years' time, Japan needs to take this opportunity to get as much out of the occasion as it can."

And he added that did not mean selling more Olympic-themed trinkets than had been sold at other Games.

"There is stagnation, anxiety and a feeling that we're lost, drifting and can't find the solutions to the problems that we face in Japan today," Watanabe said. "Not just economic problems, but also those in politics and society. 2020 could be a good goal for identifying those solutions and going some way to putting them in place."

The last time Tokyo hosted the Games - in 1964 - the occasion was seen as a catalyst to the re-emergence of the nation, but Watanabe did not sound convinced that would necessarily be repeated this time around.

"We will just have to make the best of it and see what happens," he said with a shrug.

Nearly 50 years ago, the Tokyo Olympics coincided with the emergence of the nation as an economic force on a global scale and served to reintegrate into the broader international society the country which had triggered the war in the Pacific.

Tokyo had previously been selected to host the 1940 Olympics, but the tournament was subsequently transferred to Helsinki because of Japan's invasion of China and eventually cancelled because of the outbreak of war in Europe.

Some observers now claim modern-day Japan is closer to the nationalist dictatorship that the country was under in 1940 than it should be.

The day after the IOC announced its decision in Buenos Aires, the Chinese foreign ministry was reluctant to pass on its congratulations.

"We have noted the decision by the International Olympic Committee," was the most that could be dragged out of Hong Lei , a spokesman for the foreign ministry in Beijing.

Asked specifically if congratulations had been conveyed directly to Tokyo, Hong deflected the question by saying it should be directed to the Chinese Olympic Committee.

State-run media was just as reluctant to hang out the bunting to celebrate its neighbour's victory, with the Global Times criticising Japan for a "lousy job in reflecting on its misdeeds during World War II" and demanding that the government in Tokyo "adjust its attitude on history to reflect its appreciation for peace, as implied in the Olympic Spirit".

The geo-political backdrop to China's apparent disappointment, that Tokyo was chosen to host the Games over Madrid and Istanbul, inevitably involves the tension surrounding the chain of Japanese-controlled uninhabited islands in the East China Sea known as the Diaoyus in China and the Senkaku Islands in Japan. Beijing insists the islands are sovereign Chinese territory.

The timing of the IOC's announcement was unfortunate as it fell just two days before the one-year anniversary of the Japanese government nationalising the islands through its completion of their purchase from the Kurihara family.

In the past year, Chinese maritime surveillance ships, fisheries patrol vessels and naval warships have entered what Japan claims to be an exclusive economic zone around the islands. Military and civilian aircraft and, more recently, remote-controlled drones, have come close to penetrating Japanese air space around the territories.

Whenever they are challenged by the Japanese Coast Guard vessels which are constantly on station around the isles, the Chinese ships' response is that they have every right to be in the area as they are operating in Chinese territorial waters.

The two sides have so far managed to avoid a clash, although they have come close on a number of occasions, with Japan scrambling fighters to head off potential intrusions and claiming that Chinese warships had locked their fire-control radar on Japanese ships and aircraft.

With Beijing apparently willing to push the envelope, there will always be a risk of conflagration, believes Jun Okumura, an international relations analyst with the Eurasia Group.

"I worry about the drone, actually," he said. "It can't respond to warnings, can it? And it can't be definitively identified with any specific country. And you're still going to let it do its thing?

"I can imagine a military protocol under which the correct response would be to shoot it down over Japanese territory, like the Iranians claim to have done with a US drone," he said. "After all, you don't lose control of your air space."

The failure to applaud Tokyo securing the Games was mirrored in South Korea, with the right-wing Yomiuri newspaper suggesting that Seoul had gone further in attempting to frustrate Japan's Olympic ambitions.

"On Friday, South Korea announced it would ban imports of marine products from Fukushima and seven other prefectures," the paper thundered in an editorial on Wednesday. "This step, devoid of any scientific backing, is seen by some as an attempt by Seoul to tarnish Tokyo's image."

But Watanabe insists the Games can be a catalyst to bring the region's competing nations closer together. "Reading between the lines in some of the state media editorials, it seems they are trying to improve bilateral relations and seeking a way out of the current impasse," he said. "But there is a strong resistance to that in Chinese society so it will be a slow process, but it could be a good goal for both nations for 2020."